Antam may cancel plan to buy Martabe mine

State-owned miner PT Aneka Tambang (Antam) may cancel its plan to take over a Martabe gold/silver project in North Sumatra amid the current global credit crunch, Kontan reported on Saturday.

Antam president director Alwin Syah Loebis said that the general mining company previously planned to raise bank loans to buy PT Agincourt Resources, a Indonesian unit of Australian mining firm OZ Minerals.

The Martabe project is currently 100% owned by OZ Minerals, with 5% held in trust for local Indonesian stakeholders. OZ Minerals is a new company created by the merger of Australian firms Zinifex and Oxiana Limited.

But, with the worsening credit crunch in the global financial market, it would be difficult for Antam to raise bank loans for the planned purchase of Agincourt Resources, Alwin said.

Antam signed an memorandum of understanding (MoU) in early July to buy 10 percent from Oxiana Limited for US$66.5 million. Antam is currently conducting due diligence on the Martabe mine.

The US$310 million Martabe project is expected to produce about 200,000 ounces of gold and 2,000,000 ounces of silver over a nine year life from project completion in late 2009.

Alwin said that Antam would instead focus its plan to build an alumina plant in Tayan, South Kalimantan. For this project alone, Antam would have to set aside about US$450 million. (*)